The invention relates generally to methods of securing disability insurance benefits and, more specifically, to novel methods, generally configured with computer and software technology, of securing Social Security disability insurance benefits, recovering overpayments of disability insurance benefits made to a disabled individual by a client insurance company or self-insured employer, and providing limited computer access to the method by client insurance companies or self-insured employers, so that the client can make referrals, provide or confirm overpayment calculations and otherwise monitor selected steps in the method.
The assignee's core business consists of representing individual claimants before the Social Security Administration (SSA) for purposes of obtaining Social Security disability insurance benefits (SSDI). Traditionally, the applicants' primary customers (clients) are insurance carriers that write long-term disability (LTD) policies and self-insured employers who desire to reduce their long-term disability expense by obtaining SSDI for their policy holders or their individual employees. In connection with the provision of services to his clients, the assignee has developed new business methods to provide such services utilizing sophisticated computer programs, databases and electronic fund retrieval methods.
On average, it takes SSA twelve to eighteen months to process a claim for SSDI. Once SSDI is awarded, generally there is a retroactive benefit representing disability payments that should have been paid by the SSA beginning with the sixth full month an individual is off work due to disability. LTD plans are designed to offset the LTD benefit upon the disabled individual's receipt of SSDI. In other words, once SSDI is obtained for a claimant, the LTD is reduced. However, full LTD benefits are paid until the SSDI is awarded. Generally, the disabled employee signs an agreement to repay any overpayment created by the award of retroactive SSDI. A portion of the retroactive SSDI, therefore, is due to the LTD plan as repayment of this overpayment.
For example, a disabled individual is receiving $1,400 per month in LTD. After 18 months, SSA awards disability benefits of $1,000 per month. SSA issues a retroactive check for 12 months of benefits (SSA does not pay during the 5-month waiting period) or $12,000. Based on the plan design the disabled employee's LTD benefit will be reduced by $900 per month, for a net LTD benefit of $500. Since the disabled individual was paid $1,400, he or she would owe the plan $900×12 months, or $10,800.
Additionally, the disabled individual receives a number of financial advantages upon receipt of SSDI:
Increased Monthly Income
Although the initial SSDI may be offset by other disability or retirement benefits the disabled individual already is receiving, the SSDI cost-of-living increases may not. Thus, the combined benefits may increase each year when SSDI cost-of-living increases are paid.
Increased Retirement and Survivors' Benefits
Social Security disability entitlement “freezes” the Social Security earnings record. Social Security regulations stipulate that any years “wholly or partially within a period of disability” will be excluded from the computation of future benefits. Thus, the amount of eventual Social Security retirement benefits, dependents' benefits, or even a subsequent disability or survivors' benefits, may be higher because these lost years of earnings will not be considered in future computations.
Medicare Coverage
After the individual has received SSDI for twenty-four months, regardless of age, he or she also becomes eligible for Medicare benefits. This includes Part A hospital benefits and Part B medical benefits.
Surviving on lower income with mortgages, car payments and other debts is frightening to disabled individuals. When they receive a large check for retroactive benefits, it is difficult to resist the temptation or necessity to use the money to improve their situation. LTD plans were experiencing difficulty collecting this overpayment. The plans were using a variety of collection scenarios:                1. Hope for a lump sum payment by the disabled individual;        2. Recover the overpayment from future benefits ($10,800÷$500=21.6 months); or        3. Refer the individual to a collection agency.        
Scenario 1 generally yields a collection rate of 45% to 65% depending on the dollar value of the overpayment. Overpayments of under $10,000 were paid more readily than amounts over $10,000. Scenario 2 only worked if the individual remained on claim long enough to collect the total amount owed. Too often the individual went off claim due to age or death. Additionally, the LTD plan fiduciary lost the time value of money. Worst case is scenario 3, which yields only $0.50 to $0.60 on the dollar. Scenarios 2 and 3 did not promote a positive relationship with the disabled individual. Hence, the inventors recognized the need for assistance in, and a method for, the enhanced recovery of the overpayment, particularly a process that allows monitoring and limited participation by the client insurance carrier or self-insured employer.
Based upon the foregoing, therefore, it would be advantageous to provide a method of obtaining SSDI and recovering any overpayments of LTD benefits for a client insurance carrier or self-insured employer. Furthermore, it would be advantageous to provide such a method that allows a client insurance carrier or self-ensured employer to expeditiously provide or confirm the necessary overpayment calculation upon the award of SSDI and to otherwise monitor the progress of the overpayment recovery procedures for its policyholders or employees as its progresses.